Arsenal manager Arsène Wenger had been keen on Shaw taking the same path to north London as previous recruits Theo Walcott and Alex Oxlade-Chamberlain, but his Southampton counterpart Nigel Adkins has persuaded the 17 year-old that his long-term ineterests are best served by staying on the south coast.

Shaw is now expected to sign a five-year deal when he turns 18 on July 12.

“He is a young player and we’ve got to protect him and look after him,” Adkins said. “You can be built up so much then all of a sudden knocked down. We’ve got to allow him to flourish.”

Arsenal have also shown interest in Crystal Palace winger Wilfried Zaha although Manchester United remain in pole position to sign the 20 year-old, who made his senior England debut against Sweden in Stockholm last November.

United have yet to agree a fee with Palace for the Ivory Coast-born Zaha, with the Championship club’s £15 million valuation regarded as too high by senior figures at Old Trafford.

But while rival clubs have dropped out of the running to sign Zaha due to the perception that a deal with United is as good as done, Wenger is still prepared to fight it out with Sir Alex Ferguson to sign the player.

Wenger’s pursuit of Zaha is understood to be unaffected by the outcome of Arsenal’s contract talks with Theo Walcott and sources close to Zaha have suggested that the youngster remains open-minded about the prospect of moving to Old Trafford or the Emirates.

Ferguson’s recent insistence that winger Nani will not be sold this month has dented Arsenal’s hopes of signing the unsettled Portugal international, but Zaha’s availability has given Wenger another option.

United are prepared to loan Zaha back to Selhurst Park for the remainder of the season, however, if they can conclude a deal for the player - an element which is regarded as key by Palace, who are determined to have Zaha available for their push for promotion to the Premier League.

There is also the prospect of United offering out-of-favour Italian forward Federico Macheda to Palace as part of the deal.